Green Room

There’s ALWAYS rationing

posted at 1:13 pm on December 7, 2009 by

All scarce goods are rationed somehow. It doesn’t matter how the good is allocated: If there is more of the good desired at a zero price than is available, some mechanism develops that determines who gets it. Thus for mammograms, California now wants to bar those under 50 from getting the good for free. The Senate, meanwhile, wants free mammograms for any woman over 40.

Steve Chapman runs the cost-benefit for us:

The task force’s rationale was that the benefits of routine breast cancer screening to women in that age group are insufficient to justify the harms it causes them. Yes, it can be expected to save one life for every 1,904 women age 40 to 49 who get mammographies, but it also yields false positives, which require additional procedures.

Even when the positives are not false, they often lead to unnecessary treatment — surgery, radiation and chemotherapy — for tumors that pose little risk. The panel noted that mammograms often serve only to detect “a slower-growing cancer that would have eventually become clinically apparent but would never have caused death.”

In the open market, mammograms are about $100. (Source.) So one might ask how to solve the question: If a mammogram saves a life one time in 1,904 procedures, it would be rational for you to spend $100 on one if you valued your life at $190,400. Given that most statistical value of a life calculations are measured in millions (Dept. of Transportation example, article in Regulation) this means that the rational person under the age of 50 will pay for the procedure herself, if someone else does not pay for it. The vote on the Mikulski amendment was only to decide who pays for them, not that they won’t get done. Unless somehow we conclude that health reform is going to force mammograms into back alleys, we’re only fighting over income distribution here.

A note for my conservative friends then: First, there’s always rationing. Second, there can be such a thing as too many mammograms, just as there could be too many prostate tests. There may be, in fact, more mammograms now than would happen in the free market, or there may be less. We don’t know, we don’t live in a free market for mammograms. Where there are free markets, like LASIK, prices seem to come down. Perhaps the price of a mammogram would drop significantly if only we told the government don’t pay for them, let us decide for ourselves.

Let’s drop the “they’re rationing!” bogeyman. When government says it wants to control costs ask “whose costs are those?” If it wants to control its costs say “fine, let us keep our money and let us bear the costs. We might make a better decision than you do anyway.”

(h/t for Chapman link: Russ Roberts)

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The vote on the Mikulski amendment was only to decide who pays for them, not that they won’t get done.

If this is the case, then it’s probably a good idea, IMO.

Daggett on December 7, 2009 at 1:33 PM

Actually, trying to make the case for rationing by price distorts the meaning of ‘rationing’.

If something is arbitrarily limited by fiat, it means you can not get that thing at any price (absent corruption and bribery).

“Rationing” by price simply means that if you don’t have enough money to buy the thing, you also have the option to go find more money.

Skandia Recluse on December 7, 2009 at 1:49 PM

As i said in a previous thread, the real question is who rations – the government or the private market. As has been shown time and again, rationing by an efficent private market will find the ration that maximizes overall societal benefit.

rock the casbah on December 7, 2009 at 1:57 PM

The worrisome part of the California rationing story isn’t only for those who are not covered, but for those who are currently covered to get mammograms. The fear is that the ObamaCare health rationing panel recommendations will make decisions based on finances rather than science. The mammogram recommendations were made by a panel that had no oncologists on it. Those with health insurance who can get mammograms now may have those benefits cut in the future, because of the faulty recommendations of this panel. It’s only mammograms now, but down the line we’ll see limits on other diagnostic tests based on government recommendations made by politicians wanting to cut costs.

It also flies in the face of the Obama argument that health care costs will decrease with preventative care. If we are cutting preventative care and no longer catching serious illness early, then we will pay more later. I know the faulty logic of this through the Hot Air articles. While preventative care does not save money, from a health care view, it is a desirable goal to save as many lives as possible.

redeye on December 7, 2009 at 2:07 PM

Philosophically, you make great points.

Politically, Dems have been masters of “bogeyman” politics, and it has been effective. The GOP needs to give it back, hard and often.

cs89 on December 7, 2009 at 2:17 PM